Wal-Mart

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Posted by kaori 03/03/2009 @ 23:12

Tags : wal-mart, retailers, business

News headlines
Is Wal-Mart Gearing Up For Apple Mac Sales? - ChannelWeb
Will we soon see sparkly new Apple Macs lining the aisles at Wal-Mart? Wal-Mart on Monday confirmed it was planning to renovate and revamp the electronics departments in its 3500 stores, adding new signage and displays for an "easy-to-find" consumer...
Wal-Mart makes electronics assault on Best Buy official - ZDNet
Wal-Mart confirmed plans to bolster its electronics selection in a move to grab the void left by Circuit City before Best Buy grabs it all. Confirming a Wall Street Journal report on Monday, Wal-Mart issued a statement on its grand electronics plan...
Wal-Mart loses appeal to get $30M in North Carolina tax refunds - Bizjournals.com
The North Carolina Court of Appeals has denied Wal-Mart's attempt to win $30 million in tax refunds from the state of North Carolina. The case originally was filed in Wake County in 2006 and pitted Wal-Mart Stores East Inc., which operates retail...
Wal-Mart's Journey Toward Sustainability and Greater Value - Reuters
By Leslie Guevarra - Leslie Guevarra Rand Waddoups is senior director of Business Strategy and Sustainability for Wal-Mart Stores Inc. Almost four years ago, Wal-Mart announced three major goals that have since driven the company's operations...
Wal-Mart upgrades electronics departments: Journal - MarketWatch
Beginning on Monday, Wal-Mart is installing more spacious and more interactive electronics showcases, the Journal reported. And the Bentonville, Ark., company has been stocking a more sophisticated product line, moving away from entry-level models and...
What Do Starbucks and Wal-Mart Have in Common? - Huffington Post
"The regional manager literally told us that we weren't allowed to invite people to union meetings...that's the same kind of violation that you see at Wal-Mart," said Erik Forman, a former Starbucks employee fired for union organizing....
Walmart to roll out video game trade-in kiosks - USA Today
Walmart is bringing e-Play kiosks to 77 of its stores that allow users to trade in used video games, says a representative for the retailer. The e-Play website offers details on how to execute trade-ins, which require both a credit card and...
Thief tricked Wal-Mart employees into helping her steal $1300 TV - Kansas City Star
Story is from Joplin, where a woman dressed like a Wal-Mart employee went into a backroom and got a couple of employees to help her load a TV onto a cart, which the thief wheeled to the parking lot and her accomplice. This is only a preview....
Walmart Cantaloupe Recall Due to Risk of Salmonella Food Poisoning - AboutLawsuits.com
A produce supplier for Walmart has pulled an entire lot of whole cantaloupes from store shelves for fears that they may be contaminated with bacteria that causes salmonella food poisoning. The Walmart cantaloupe recall was issued by L&M Companies,...
Wal-Mart To Carry Palm Pre - InformationWeek
By Marin Perez Wal-Mart is making a strong push to revamp its electronics departments in order to lure customers from rivals such as Best Buy and Amazon.com, according to a report in The Wall Street Journal. At Web 2.0 Expo,...

Criticism of Wal-Mart

A typical Wal-Mart Supercenter in Madison Heights, Virginia

Wal-Mart has been subject to criticism by various groups and individuals. Labor unions, community groups, grassroots organizations, religious organizations, and environmental groups protest against Wal-Mart, the company's policies and business practices, and Wal-Mart customers. Other areas of criticism include the corporation's foreign product sourcing, treatment of product suppliers, environmental practices, the use of public subsidies, and the company's security policies. Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency.

In 2005, labor unions created new organizations and websites to influence public opinion against Wal-Mart, including Wake Up Wal-Mart (United Food and Commercial Workers) and Wal-Mart Watch (Service Employees International Union). By the end of 2005, Wal-Mart had launched Working Families for Wal-Mart to counter criticisms made by these groups. Additional efforts to counter criticism include launching a public relations campaign in 2005 through their public relations website, which included several television commercials. The company retained the public relations firm Edelman to interact with the press and respond to negative or biased media reports, and has started interacting directly with bloggers by sending them news, suggesting topics for postings, and sometimes inviting them to visit their corporate headquarters.

Economists suggest that Wal-Mart is a success because it sells products that people want to buy at low prices, satisfying customer's wants and needs. However, Wal-Mart critics argue at the same time Wal-Mart's lower prices draw customers away from other smaller businesses, hurting the community.

When Wal-Mart plans new store locations, activists sometimes oppose the new store and attempt to block its construction. Opponents to the new Wal-Mart cite concerns such as traffic congestion, environment problems, public safety, absentee landlordism, bad public relations, low wages and benefits, and predatory pricing. Opposition sometimes includes protest marches by competitors, activists, labor unions, and religious groups. In some instances, activists demonstrated opposition by causing property damage to store buildings or by creating bomb scares. Some city councils have denied permits to developers if they plan to include a Wal-Mart in their project. Those who defend Wal-Mart cite consumer choice, the overall benefits to the economy, and object to bringing the issue into the political arena.

Archaeologists oversaw construction and discovered a small clay and stone altar along with some other artifacts where the store's parking lot is now located.

In 1998, Wal-Mart proposed construction of a store off Charlotte Pike near Nashville, Tennessee. The building site was home to both American Indian burial grounds and a Civil War battle site. Protests were mounted by American Indians and the Civil War interest groups, but the Wal-Mart was eventually constructed after moving graves and some modifications of the site so as not to interfere with the battlefield. Civil War relics were also discovered at the site. The project developers, JDN Realty of Atlanta, donated land to permit access to the Civil War historic site. The Indian burials were removed and re-buried.

Wal-Mart is one of the largest corporations in the world. Critics worry about the presence of Wal-Mart in their local communities. Studies have found both positive and negative effects on local businesses, jobs and taxpayers.

A Loyola University Chicago study which suggested that impact a Wal-Mart store has on a local business is correlated to its distance from that store. The leader of that study admits that this factor is stronger in smaller towns and doesn't apply to more urban areas saying "It'd be so tough to nail down what's up with Wal-Mart".

For the concern of jobs, a study commissioned by Wal-Mart with consulting firm Global Insight, found that its stores' presence saves working families more than US$2,500 per year, while creating more than 210,000 jobs in the U.S. Alternately the Economic Policy Institute estimates that 196,000 jobs were lost between 2001-2006, and 68% of jobs lost were manufacturing jobs.

Another study at the University of Missouri found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.

Studies of Wal-Mart show consumers benefit from lower costs. A 2005 Washington Post story reported that "Wal-Mart's discounting on food alone boosts the welfare of American shoppers by at least $50 billion per year." A study in 2005 at Massachusetts Institute of Technology measured the effect on consumer welfare and found that the poorest segment of the population benefits the most from the existence of discount retailers. A 2004 paper by two professors at Pennsylvania State University found that U.S. counties with Wal-Mart stores suffered increased poverty compared with counties without Wal-Marts. They hypothesized, to explain their results: This could be due to the displacement of workers from higher-paid jobs in the retailers customers no longer choose to patronize, Wal-Mart providing less local charity than the replaced businesses, or a shrinking pool of local leadership and reduced social capital due to a reduced number of local independent businesses.

Because Wal-Mart employs some part-time and relatively low paid workers, some of these workers may partially qualify for some state welfare programs. This has led critics to claim that Wal-Mart increases the burden on taxpayer-funded services. A 2002 survey by the state of Georgia's subsidized healthcare system, PeachCare, found that Wal-Mart was the largest private employer of the parents of children enrolled in its program, one quarter of the employees of Georgia Wal-Marts qualified to enroll their children in Medicaid. A 2004 study at the University of California, Berkeley charges that Wal-Mart's low wages and benefits are insufficient and, although decreasing the burden on the social safety net to some extent, California taxpayers still pay $86 million a year to Walmart employees.

Wal-Mart has been accused of selling merchandise at such low costs that competitors have tried to sue them for predatory pricing (intentionally selling a product at low cost in order to drive competitors out of the market). In 1995, in the case of Wal-Mart Stores, Inc. v. American Drugs, Inc., American Drugs accused Wal-Mart of selling items at too low a cost for the purpose of injuring competitors and destroying competition. The Supreme Court of Arkansas ruled in favor of Wal-Mart saying that their pricing, including the use of loss leaders, was not predatory pricing. In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods at low cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets. Crest Foods filed a similar lawsuit in Oklahoma, accusing Wal-Mart of predatory pricing on several of its products, in an effort to drive their own company-owned store in Edmond, Oklahoma out of business. Both cases were settled out of court with no fine and no admission of wrongdoing. In the Wisconsin case, Wal-Mart was so confident of its innocence they agreed that Wisconsin could double or triple fine them should Wal-Mart ever violate the predatory pricing law.

In 2003, Mexico's antitrust agency, the Federal Competition Commission, investigated Wal-Mart for "monopolistic practices" prompted by charges that the retailer pressured suppliers to sell goods below cost or at prices significantly less than those available to other stores. Mexican authorities found no wrong-doing on the part of Wal-Mart. However, in 2003, the German High Court ruled that Wal-Mart's low cost pricing strategy "undermined competition" and ordered Wal-Mart and two other supermarkets to raise their prices. Wal-Mart won appeal of the ruling, then the German Supreme Court overturned the appeal. Wal-Mart has since sold its stores in Germany.

Wal-Mart has been accused of using monopsony power to force its suppliers into self-defeating practices. For example, Barry C. Lynn, a senior fellow at the New America Foundation, argues that Wal-Mart's constant demand for lower prices caused Kraft Foods to "shut down thirty-nine plants, to let go 13,500 workers, and to eliminate a quarter of its products." Kraft was unable to compete with other suppliers and claims the cost of production had gone up due to higher energy and raw material costs. Lynn argues that in a free market, Kraft could have passed those costs on to its distributors and ultimately consumers. However, only in a non-free market could Kraft or any other company "pass those costs on" without losing business because in a free market, consumers are free to choose another, less expensive brand.

In some cases, predatory pricing or unfair competition laws can hurt consumers. For example, most Wal-Mart store pharmacies fill many generic prescriptions for $4 for a month's supply. However, in California and ten other states, complaints from other pharmacies has resulted in Wal-Mart being required to charge at least $9 for a month's supply of certain drugs.

With close to two million employees worldwide, Wal-Mart has faced a torrent of lawsuits and issues with regards to its workforce. These issues involve low wages, poor working conditions, inadequate health care, as well as issues involving the company's strong anti-union policies. Critics point to Wal-Mart's high turnover rate as evidence of an unhappy workforce, although other factors may be involved. Approximately 70% of its employees leave within the first year.

On the other hand, positions at Wal-Mart are in great demand. When the Wal-Mart store in Evergreen Park (near Chicago, Il) opened, 25,000 people applied for the 325 positions. Previously, the Wal-Mart in Oakland, California received 11,000 applications when it opened. Wal-Mart's Chicago-area manager Chad Donath said “we got an amazing response” and “that incredible number of applications shows the community thinks Wal-Mart is a great place to work.” He noted that generally stores receive between 3,000 and 4,000 applications for about 300 to 450 positions.

The activist group Los Angeles Alliance for a New Economy said "in 2006 Wal-Mart reports that full time hourly associates received, on average, $10.11 an hour." They further calculated that working 34 hours per week an employee earns $17,874 per year and claimed that's about 20 percent less than the average retail worker. (The number of hours the "average retail worker" worked was not specified) The report from LAANE further opines that this pay is "over $10,000 less than what the average two-person family needs." Wal-Mart managers are judged, in part, based on their ability to control payroll costs. Some say this puts extra pressure on higher-paid workers to be more productive.

By contrast, Wal-Mart insists its wages are generally in line with the current local market in retail labor, although direct comparisons are complicated because Wal-Mart employs more part time workers and the company's more extensive training, supervision and automation provides opportunity to workers with little or no experience or skills and this may account for wage differences. Wal-Mart grants "full time" benefits to those working as little as 34 hours per week but does not limit workers to just 34 hours per week. The company does control labor costs by discouraging overtime.

In August 2006, Wal-Mart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 U.S. Wal-Mart and Sam's Club locations, but the same time would institute pay caps on veteran workers. While they maintain that the measures are necessary to stay competitive, critics believe that the salary caps are primarily an effort to push higher-paid veteran workers out of the company.

New, full-time Wal-Mart associates must work ninety days before receiving their first raise (ranging from 25 to 60 cents).

Wal-Mart has also faced accusations involving poor working conditions of its employees. For example, a class action lawsuit in Missouri asserted approximately 160,000 to 200,000 people who were forced to work off-the-clock, were denied overtime pay, or were not allowed to take rest and lunch breaks. In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had been forced to work off-the-clock. The company has also faced similar lawsuits in other states, including Pennsylvania, Oregon and Minnesota. Class-action suits were also filed in 1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees.

On October 16, 2006, approximately 200 workers on the morning shift at a Wal-Mart Super Center in Hialeah Gardens, Florida walked out in protest against new store policies and rallied outside the store, shouting "We want justice" and criticizing the company's recent policies as "inhuman." This marks the first time that Wal-Mart has faced a worker-led revolt of such scale, according to both employees and the company. Reasons for the revolt included cutting full-time hours, a new attendance policy, and pay caps that the company imposed in August 2006, compelling workers to be available to work any shift (day, swing or night), and that shifts that would be assigned by computers at corporate headquarters and not by local managers. Wal-Mart quickly held talks with the workers, addressing their concerns. Wal-Mart asserts that its policy permits associates to air grievances without fear of retaliation.

The report by Congressman Miller alleged that in ten percent of Wal-Mart's stores, nighttime employees were locked inside, holding them prisoner. There has been some concern that Wal-Mart's policy of locking their nighttime employees in the building has been implicated in a longer response time to dealing with various employee emergencies, or weather conditions such as hurricanes in Florida. Wal-Mart said this policy was to protect the workers, and the store's contents, in high-crime areas and acknowledges that some employees were inconvenienced in some instances for up to an hour as they had trouble locating a manager with the key. However, fire officials confirm that at no time were fire exits locked or employees blocked from escape. Wal-Mart has advised all stores to ensure the door keys are available on site at all times. The issue has become less of a problem with the increase in the number of twenty-four hour stores.

Wal-Mart has been accused of allowing illegal immigrants to work in their stores. In one case, federal investigators say Wal-Mart executives knew that contractors were using illegal immigrants as they had been helping the Federal government with an investigation for the previous three years. Some critics said that Wal-Mart directly hired illegal immigrants, while Wal-Mart claims they were employed by contractors who won bids to work for Wal-Mart.

On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 U.S. states in a crackdown known as "Operation Rollback," resulting in the arrests of 250 nightshift janitors who were undocumented. Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing illegal immigrants to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cleaning services. Wal-Mart blamed the contractors, but federal investigators point to wiretapped conversations showing that executives knew some workers didn't have the right papers. The October 2003 raid was not the first time Wal-Mart was found using unauthorized workers. Earlier raids in 1998 and 2001 resulted in the arrests of 100 workers without documentation located at Wal-Mart stores around the country.

In November 2005, 125 alleged undocumented immigrants were arrested while working on construction of a new Wal-Mart distribution center in eastern Pennsylvania. According to Wal-Mart, the workers were employees of Wal-Mart's construction subcontractor.

As of October 2005, Wal-Mart's health insurance covered 44% or approximately 572,000 of its 1.3 million U.S. workers. In comparison, Wal-Mart rival Costco insures approximately 96% of its eligible workers, although Costco has been criticized by investors for its high labor costs. Wal-Mart spends an average of $3,500 per employee for health care, 27% less than the retail-industry average of $4,800. When asked why so many Wal-Mart workers choose to enroll in state health care plans instead of Wal-Mart's own plan, Wal-Mart CEO Lee Scott acknowledged that some states' benefits may be more generous than Wal-Mart's own plan: "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums." Critics of Wal-Mart argue in Wal-Mart: The High Cost of Low Price that employees are paid so little they cannot afford health insurance.

According to a September 2002 survey by the state of Georgia, one in four children of Wal-Mart employees were enrolled in PeachCare for Kids, the state's health-insurance program for uninsured children, compared to the state's second-biggest employer, Publix, which had one child in the program for every 22 employees. A December 2004 nationwide survey commissioned by Wal-Mart showed that the use of public-assistance health-care programs by children of Wal-Mart workers was at a similar rate to other retailers' employees, and at rates similar to the U.S. population as a whole.

On October 26, 2005, a Wal-Mart internal memo sent to the firm's Board of Directors advised trimming over $1 billion in health care expenses by 2011 through measures such as attracting a younger, implicitly healthier work force by offering education benefits. The memo also suggested giving sedentary Wal-Mart staffers, such as cashiers, more physically demanding tasks, such as "cart-gathering," and eliminating full-time positions in favor of hiring part-time employees who would be ineligible for the more expensive health insurance and several policy proposals which may violate the Americans with Disabilities Act of 1990. The memo also accused Wal-Mart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid," whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician. Critics point to this story as evidence that Wal-Mart purports to be generous with its employee benefits, while in reality the company is working to cut such benefits by reducing the number of full-time and long-term employees and discouraging supposedly unhealthy people from working at Wal-Mart.

On April 17, 2006, Wal-Mart announced it was making a health care plan available to part-time workers after 1 year of service, instead of the prior 2 year requirement. One criticism of the new plan is that it provides benefit only after a $1,000 deductible is paid ($3,000 for a family). These deductibles may financially be out of reach for eligible part-time workers. Wal-Mart estimates this change can add 150,000 workers to health coverage plans, if all who are eligible take part. By January 2007, the number of workers enrolled in the company's health care plans increased by 8%, which Wal-Mart attributed to the introduction of less expensive insurance policies. However, even with this increase, less than half of Wal-Mart's employees, or 47.4%, received health insurance through the company, with 10%, or 130,000, receiving no coverage at all.

In March 2008, Wal-Mart sued a former Wal-Mart employee to recover the money it spent for her health care. The employee, Deborah Shank, was brain-damaged in a car accident. Wal-Mart sued her after she received a settlement from the accident, citing that company policy forbids them from receiving coverage if they also win a settlement in a lawsuit. After a wave of bad publicity, Wal-Mart dropped its suit.

New, full-time Wal-Mart associates must work at least six months before being eligible to purchase the company's primary health insurance.

Wal-Mart has been criticized for its policies against labor unions. Critics blame workers' reluctance to join the labor union on Wal-Mart anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize. Wal-Mart states that it is not anti-union but, "pro-associate," arguing that its employees do not need to pay third parties to discuss problems with management as the company's open-door policy enables employees to lodge complaints and submit suggestions all the way up the corporate ladder. In 1970, company founder Sam Walton resisted a unionization push by the Retail Clerks International Union in two small Missouri towns by hiring a professional union buster, John Tate, to educate workers on the negative aspects of unions. On Tate's advice, he also took steps to show his workers on how the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program. A few years later, Wal-Mart hired a consulting firm, Alpha Associates, to develop a union avoidance program.

In 2000, meat cutters in Jacksonville, Texas voted to unionize. Wal-Mart subsequently eliminated in-house meat-cutting jobs in favor of prepackaged meats on the claims that it cut costs and was a preventive measure to lawsuits. Wal-Mart claimed that the nationwide closing of in-store meat packaging had been planned for many years and was not related to the unionization. In June 2003, a National Labor Relations Board judge ordered Wal-Mart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales.

Wal-Mart's anti-union policies also extend beyond the United States. The documentary Wal-Mart: The High Cost of Low Price, shows one successful unionization of a Wal-Mart store in Jonquière, Quebec (Canada) in 2004, but Wal-Mart closed the store five months later because the store had become unprofitable due to the costs of union demands. In September 2005, the Québec Labor Board ruled that the closing of a Wal-Mart store amounted to a reprisal against unionized workers and has ordered additional hearings on possible compensation for the employees, though it offered no details.

In March 2005, Tom Coughlin was forced to resign from Wal-Mart's Board of Directors, facing charges of embezzlement. Coughlin claimed that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers Union in exchange for a list of names of Wal-Mart employees that had signed union cards. He also claimed that the money was unofficially paid to him, by Wal-Mart, as compensation for his anti-union efforts. In August, 2006, Coughlin pleaded guilty to stealing money, merchandise, and gift cards from Wal-Mart, but avoided prison time due to his poor health. He was sentenced to five years probation and required to pay a $50,000 fine and $411,000 in restitution to Wal-Mart and the Internal Revenue Service. U.S. Attorney Robert Balfe has stated that no evidence was found to back up Coughlin's initial claims, and Wal-Mart continues to deny the existence of the anti-union program, though Coughlin himself apparently restated those claims to reporters after his sentencing.

Wal-Mart has also had some run-ins with the German Ver.di labor union as well. These issues, combined with cultural differences and low performing stores, led Wal-Mart to pull out of the German market entirely in 2006.

In August 2006, Wal-Mart announced that it would allow workers at all of its Chinese stores to become members of trade unions, and that the company would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff.

As a large customer to most of its vendors, Wal-Mart openly uses its bargaining power to bring lower prices to attract its customers. The company negotiates lower prices from vendors. For certain basic products, Wal-Mart "has a clear policy" that prices go down from year to year. If a vendor does not keep prices competitive with other suppliers, they risk having their brand removed from Wal-Mart's shelves in favor of a lower-priced competitor. Critics argue that this pressures vendors to shift manufacturing jobs to China and other third world nations, where the cost of labor is less expensive.

In the mid-1990s, Wal-Mart had a "Buy American" campaign. But by 2005, about 60% of Wal-Mart's merchandise was imported, compared to 6% in 1995. In 2004, Wal-Mart spent $18 billion on Chinese products alone, and if it were an individual economy, the company would rank as China's eighth largest trading partner, ahead of Russia, Australia, and Canada. One group estimates that the growing US trade deficit with China, heavily influenced by Wal-Mart imports, is estimated to have moved over 1.5 million jobs that might otherwise be in America to China between 1989 and 2003. According to the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), "Wal-Mart is the single largest importer of foreign-produced goods in the United States", their biggest trading partner is China, and their trade with China alone constitutes approximately 10% of the total US trade deficit with China as of 2004.

While the company certainly imports many products, it points out that it purchases goods from more than 68,000 US vendors, spending $137.5 billion in 2004, and supporting more than 3.5 million supplier jobs in the US.

Wal-Mart has been criticized for not providing adequate supervision of its foreign suppliers. It has also been criticized for using sweatshops and prison labor. For example, in 1995, Chinese dissident Harry Wu charged that Wal-Mart was contracting prison labor in Guangdong Province. However, Wal-Mart says they do not use prison labor. There have also been reports of teenagers in Bangladesh working in sweatshops 80 hours per week at $0.14 per hour, for Wal-Mart supplier Beximco. In 1994, Guatemalan Wendy Diaz reported that she had been working for Wal-Mart at $0.30 per hour at age 13. The film Wal-Mart: The High Cost of Low Price shows images of factories that produce goods for Wal-Mart that appear in poor condition, and factory workers subject to abuse and conditions the documentary producers consider inhumane.

According to Wal-Mart and many self-described advocates of free trade, comparisons of wage levels between vastly different countries is not a useful way to assess the fairness of a trade policy. The company also points out that wages paid to overseas workers are comparable to or exceed local prevailing wages. In that case, the company claims that the overseas manufacturing jobs it creates are often an improvement in the quality of life for its employees. They have also drawn attention to the fact that factory jobs with its suppliers are often safer and healthier than local alternatives, which may include prostitution, the drug trade or scavenging.

In June 2006, Wal-Mart was excluded from the investment portfolio of The Government Pension Fund of Norway, which held stock values of about US$ 430 million in the company, due to a social audit into alleged labor rights violations in Wal-Mart operations in the US, Canada, Latin America, Africa and Asia. Although Wal-Mart did not respond to questions from the fund's auditors, the company later claimed the decision "don't appear to be based on complete information".

Wal-Mart's product selection has been criticized by some groups in the past, primarily as viewed as a promotion of a particular ideology or as a responses to their original rural, religious target market. For example, in 2003, Wal-Mart removed certain men's magazines from their shelves, such as Maxim, FHM, and Stuff, citing customer complaints regarding their racy content. Later that year, they decided to partly obscure the covers of Redbook, Cosmopolitan, and Marie Claire on store shelves due to "customer concerns", and refused to stock an issue of Sports Illustrated's swimsuit special because it took exception to one photograph.

Since 1991, Wal-Mart also has not carried music albums marked with the Recording Industry Association of America's (RIAA's) Parental Advisory Label (contradictory to the allowance of R-rated movies and video games rated Mature), although they carry edited versions of such albums, with obscenities removed or overdubbed with less offensive lyrics. In one example in 2005, Wal-Mart rejected the original cover of Willie Nelson's reggae album, Countryman, which featured marijuana leaves, in an apparent pro-marijuana statement. To satisfy Wal-Mart, the record label, Lost Highway Records, issued the album with an alternate cover, without recalling the original cover. Wal-Mart has never carried Marilyn Manson albums, solely because of the controversy surrounding the group, but recently began selling Nine Inch Nails albums after rejecting them for years. In fact, some albums that do not carry "Parental Advisory" stickers, but include profanities are not edited. Such albums include Pink Floyd's Dark Side of the Moon and Arctic Monkeys' Whatever People Say I Am, That's What I'm Not. However, Wal-Mart's policy on carrying albums with the Parental Advisory Label seems to vary by country, as albums containing the label can be found in Canadian Wal-Mart stores, for example.

In 1999, Wal-Mart announced that it would not stock emergency contraception pills in its pharmacies, not citing any particular reasons except for a "business decision" that was made earlier. The move was criticized by family planning advocates, citing that women in small towns where Wal-Mart pharmacies had little competition would have greater difficulties in obtaining the drug. The decision was challenged in 2006, as three Massachusetts women filed suit against the company after they were unable to purchase emergency contraception at their local Wal-Mart stores, resulting in a ruling that required Wal-Mart to stock the drug in all of its pharmacies in Massachusetts. Expecting that other states would soon do the same, Wal-Mart reversed its policy and announced that they would begin to stock the drug nationwide, while at the same time maintaining its conscientious objection policy, allowing any Wal-Mart pharmacy employee who does not feel comfortable dispensing a prescription to refer customers to another pharmacy.

Wal-Mart has also been criticized for selling some products. For example, in 2004 Wal-Mart carried the anti-Semitic forgery The Protocols of the Elders of Zion in its online catalogue and Wal-Mart's online product description suggested the text might be genuine. The Anti-Defamation League wrote to the President of Wal-Mart on 21 September 2008 noting the text, "has been the major weapon in the arsenals of anti-Semites around the world," and called on Wal-Mart to, "unequivocally state the nature of the book and to disassociate itself from any endorsement of it." Wal-Mart stopped selling the book shortly thereafter.

In October 2004, Wal-Mart cancelled its order for The Daily Show's America (The Book) after discovering a page that depicts each US Supreme Court judge nude. A week later, it returned copies of George Carlin's When Will Jesus Bring the Pork Chops?, with a cover recreating The Last Supper with Jesus' seat empty and Carlin seated next to it. The company claimed that the copies were shipped to it by mistake and a Wal-mart spokeswoman said she "didn't believe this particular product would appeal" to its customer base.

In January 2006, Wal-Mart was criticized for the recommendation system on its website which suggested that some African American-related DVDs, such as Introducing Dorothy Dandridge and documentaries on Martin Luther King, Jr. were similar to the Planet of the Apes television series DVD box set. It quickly corrected the page, saying that it was a software glitch, but ultimately blamed the matter on human error.

Until the mid-1990s, Wal-Mart took out corporate-owned life insurance policies on employees including "low-level," employees such as janitors, cashiers, cart pushers, and stockers. This type of insurance is usually purchased to cover a company against financial loss when a high-ranking employee dies, and is usually known as "Key Man Insurance". Critics derided them as buying "Dead Peasants Insurance" or "Janitor Insurance". Critics, as well as the US Internal Revenue Service, charge that the company was trying to profit from the deaths of its employees, and take advantage of the tax law which allowed it to deduct the premiums. The practice was stopped in the mid-1990s when the federal government closed the tax deduction and began to pursue Wal-Mart for back taxes.

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Wal-Mart

Sam Walton's original Walton's Five and Dime store in Bentonville, Arkansas, now serving as the Wal-Mart Visitor's Center

Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500. Founded by Sam Walton in 1962, it was incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the world and the third-largest utility or commercial employer, trailing the British National Health Service, and the Indian Railways. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business. It also owns and operates the North American company, Sam's Club.

Wal-Mart operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly owned operations in Argentina, Brazil, Canada, and Puerto Rico. Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful.

Wal-Mart has been criticized by some community groups, women's rights groups, grassroots organizations, and labor unions, specifically for its extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and alleged sexism.

Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J.C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.

Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.

On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas. The building is now occupied by a hardware store and a pawn shop. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1972, and was soon listed on the New York Stock Exchange. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million.

In the 1980s, Wal-Mart continued to grow rapidly, and by its 25th anniversary in 1987 there were 1,198 stores with sales of $15.9 billion and 200,000 associates. This year also marked the completion of the company's satellite network, a $24 million investment linking all operating units of the company with its Bentonville office via two-way voice and data transmission and one-way video communication. At the time, it was the largest private satellite network, allowing the corporate office to track inventory and sales and to instantly communicate to stores. In 1988, Sam Walton stepped down as CEO and was replaced by David Glass. Walton remained as Chairman of the Board, and the company also rearranged other people in senior positions.

In 1988, the first Wal-Mart Supercenter opened in Washington, Missouri. Thanks to its superstores, it surpassed Toys "R" Us in toy sales in the late 1990s. The company also opened overseas stores, entering South America in 1995 with stores in Argentina and Brazil; and Europe in 1999, buying ASDA in the UK for $10 billion.

In 1998, Wal-Mart introduced the "Neighborhood Market" concept with three stores in Arkansas. By 2005, estimates indicate that the company controlled about 20% of the retail grocery and consumables business.

In 2000, H. Lee Scott became President and CEO, and Wal-Mart's sales increased to $165 billion. In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list, with revenues of $219.8 billion and profits of $6.7 billion. It has remained there every year, except for 2006.

In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world—including 3,800 stores in the United States and 2,800 elsewhere, employing more than 1.6 million "associates" worldwide. Its U.S. presence grew so rapidly that only small pockets of the country remained further than 60 miles (100 km) from the nearest Wal-Mart.

In October 2005, Wal-Mart announced it would implement several environmental measures to increase energy efficiency. The primary goals included spending $500 million a year to increase fuel efficiency in Wal-Mart’s truck fleet by 25% over three years and double it within ten, reduce greenhouse gas emissions by 20% in seven years, reduce energy use at stores by 30%, and cut solid waste from U.S. stores and Sam’s Clubs by 25% in three years. CEO Lee Scott said that Wal-Mart's goal was to be a "good steward for the environment" and ultimately use only renewable energy sources and produce zero waste. The company also designed three new experimental stores in McKinney, Texas, Aurora, Colorado, and Las Vegas, Nevada. with wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens. Despite much criticism of its environmental record, Wal-Mart took a few steps in what is viewed as a positive direction, which included becoming the biggest seller of organic milk and the biggest buyer of organic cotton in the world, as well as reducing packaging and energy costs. Wal-Mart also spent nearly a year working with outside consultants to discover the company's total environmental impact and find where they could improve. They discovered, for example, that by eliminating excess packaging on their toy line Kid Connection, they could not only save $2.4 million a year in shipping costs but also 3,800 trees and a million barrels of oil. Wal-Mart has also recently created its own electric company in Texas, Texas Retail Energy, and plans to supply its stores with cheap power purchased at wholesale prices. Through this new venture, the company expects to save $15 million annually and also lays the groundwork and infrastructure to sell electricity to Texas consumers in the future.

In March 2006, Wal-Mart sought to appeal to a more affluent demographic. The company launched a new Supercenter concept in Plano, Texas, intended to compete against stores seen as more upscale and appealing, such as Target. The new store has wood floors, wider aisles, a sushi bar, a coffee/sandwich shop with free Wi-Fi Internet access, and more expensive beers, wines, electronics, and other goods. The exterior has a hunter green background behind the Wal-Mart letters, similar to Wal-Mart Neighborhood Markets, instead of the blue previously used at its supercenters.

On September 12, 2007, Wal-Mart introduced new advertising with the slogan, "Save Money Live Better," replacing the "Always Low Prices, Always" slogan, which it had used for the previous 19 years. Global Insight, which conducted the research that supported the ads, found that Wal-Mart's price level reduction resulted in savings for consumers of $287 billion in 2006, which equated to $957 per person or $2,500 per household (up 7.3% from the 2004 savings estimate of $2,329).

On June 30, 2008, Wal-Mart unveiled a new company logo, featuring the non-hyphenated name "Walmart" followed by a stylized spark, as it is referred to on store advertisements. The new logo received mixed reviews from some design critics, who question whether the new logo is as bold as competitors such as the Target bullseye or as instantly recognizable as the former company logo, which was used for 18 years. The new logo made its debut on the company's walmart.com website on July 1, 2008, although the old logo still appears on the corporate site, walmartstores.com. The new logo will eventually replace store logos at the company's US locations throughout the year. Wal-Mart international have not yet adopted the new logo.

Wal-Mart's operations primarily comprises three retailing subsidiaries: Wal-Mart Stores Division U.S., Sam's Club, and Wal-Mart International. The company does business in nine different retail formats: supercenters, food and drugs, general merchandise stores, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants.

Wal-Mart Stores Division U.S. is Wal-Mart's largest business subsidiary, accounting for 67.2% of net sales for financial year 2006. It consists of three retail formats that have become commonplace in the United States: Discount Stores, Supercenters, and Neighborhood Markets. The retail department stores sell a variety of mostly non-grocery products, though emphasis has now shifted towards supercenters, which include more grocery items. This division also includes Wal-Mart's online retailer, walmart.com. On February 6, 2007, the company launched a "beta" version of its new movie download service, mediadownloads.walmart.com, which sells 3,000 films and television episodes from all major studios and television networks. This service was discontinued on December 21, 2007.

Wal-Mart Discount Stores are discount department stores with size varying from 51,000 square feet (4,738.1 m2) to 224,000 square feet (20,810.3 m2), with an average store covering about 102,000 square feet (9,476.1 m2). They carry general merchandise and a selection of food. Many of these stores also have a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, a bank branch, a cell phone store and a fast food outlet. Some also have gasoline stations.

The first Wal-Mart store opened in Rogers, Arkansas in 1962.

In 1990, Wal-Mart opened its first Bud's Discount City location in Bentonville. Bud's operated as a closeout store, much like Big Lots. Many locations were opened to fulfill leases in shopping centers as Wal-Mart stores left and moved into newly built Supercenters. All of the Bud's Discount City stores closed or converted into Wal-Mart Discount Stores by 1997.

As of January 31, 2008, there were 971 Wal-Mart Discount Stores in the United States. In 2006, the busiest in the world was one in Rapid City, South Dakota.

Wal-Mart Supercenters are hypermarkets with size varying from 98,000 square feet (9,104.5 m2) to 261,000 square feet (24,247.7 m2), with an average of about 197,000 square feet (18,301.9 m2). These stock everything a Wal-Mart Discount Store does, and also include a full-service supermarket, including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce, and fresh seafood. Many Wal-Mart Supercenters also have a garden center, pet shop, pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops, such as cellular phone stores, hair and nail salons, video rental stores, local bank branches, and fast food outlets (usually Subway; several Supercenter and discount locations have also had McDonald's locations, usually with reduced menus, beginning in the early 1990s). Some Dunkin' Donuts or Blimpie restaurants can be found inside Walmart Supercenters. Some also sell gasoline distributed by Murphy Oil Corporation (whose Wal-Mart stations are branded as "Murphy USA"), Sunoco, Inc. ("Optima"), or Tesoro Corporation ("Mirastar").

The first Supercenter opened in 1988 in Washington, Missouri. A similar concept, Hypermart USA, opened in Garland, Texas a year earlier. All of the Hypermart USA stores were later closed or converted into Supercenters.

As of January 31, 2008, there were 2,447 Wal-Mart Supercenters in the United States. The nation's largest Supercenter, covering 260,000 square feet (24,000 m2) and two floors, is located in Crossgates Commons in Albany, New York.

Wal-Mart Neighborhood Markets are grocery stores that average about 42,000 square feet (3,901.9 m2). They offer a variety of products, which include full lines of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise.

Neighborhood Markets are used to fill the gap between Discount Stores and Supercenters.

The first Neighborhood Market opened in 1998 in Bentonville, Arkansas. As of January 31, 2008, there were 132 of them in the United States.

Sam's Club is a chain of warehouse clubs which sell groceries and general merchandise, often in large quantities. Sam's Club stores are "membership" stores and most customers buy annual memberships. However, non-members can make purchases either by buying a one-day membership or paying a surcharge based on the price of the purchase. Some locations also sell gasoline. The first Sam's Club opened in 1983 in Midwest City, Oklahoma under the name "Sam's Wholesale Club".

According to Wal-Mart's 2007 Annual Report, Sam's Club's sales during 2007 were $42 billion, or 12.1% of Wal-Mart's total 2007 sales. As of January 31, 2008, there were 591 Sam's Clubs in the United States.

Marketside is a new chain of grocery stores opened in October 2008, the stores are said to be less than half the size of a conventional supermarket, as stated in the backgrounder found on Wal-Mart's official homepage. Each of their stores is open from 7 a.m. to 10 p.m.

Wal-Mart's international operations currently comprise 2,980 stores in 14 countries outside the United States. According to Wal-Mart's 2006 Annual Report, the International division accounted for about 20.1% of sales. There are wholly owned operations in Argentina, Brazil, Canada, Puerto Rico (although PR is part of the US, the company's operations there are managed through its international division), and the UK. With 1.8 million employees worldwide, the company is the largest private employer in the US and Mexico, and one of the largest in Canada.

Wal-Mart has operated in Canada since its acquisition of 122 stores comprising the Woolco division of Woolworth Canada, Inc in 1994. As of October 31, 2008, it operates 310 locations, employing 77,500 Canadians, with a local home office in Mississauga, Ontario. Wal-Mart Canada's first three Supercentres (spelled as in Canadian English) opened on November 8, 2006, in Hamilton, London, and Aurora, Ontario. As of October 31, 2008, there are 39 Wal-Mart Supercentres in Canada, and six Sam's Clubs in Ontario, in London, Richmond Hill, Vaughan, Cambridge, Pickering, and Toronto). In December 2006, conversion of a Wal-Mart Discount Store into a Wal-Mart Supercentre began in Lethbridge, Alberta, making it the seventh in Canada and the first in western Canada.

Sales in 2006 for Wal-Mart's UK subsidiary, ASDA (which retains the name it had before acquisition by Wal-Mart), accounted for 42.7% of sales of Wal-Mart's international division. In contrast to Wal-Mart's US operations, ASDA was originally and still remains primarily a grocery chain, but with a stronger focus on non-food items than most UK supermarket chains other than Tesco. At the end of 2007, ASDA had 340 stores, some of which are branded ASDA Wal-Mart Supercentres, as well as ASDA Supermarkets, ASDA Living, George High Street and ASDA Essentials stores.

In addition to its wholly owned international operations, Wal-Mart has joint ventures in China and several majority-owned subsidiaries. Wal-Mart's majority-owned subsidiary in Mexico is Walmex. In Japan, Wal-Mart owns about 53% of Seiyu. Additionally, Wal-Mart owns 51% of the Central American Retail Holding Company (CARHCO), consisting of more than 360 supermarkets and other stores in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica.

In 2004, Wal-Mart bought the 116 stores in the Bompreço supermarket chain in northeastern Brazil. In late 2005, it took control of the Brazilian operations of Sonae Distribution Group through its new subsidiary, WMS Supermercados do Brasil, thus acquiring control of the Nacional and Mercadorama supermarket chains, the leaders in the Rio Grande do Sul and Paraná states, respectively. None of these was rebranded. As of August 2006, Wal-Mart operates 71 Bompreço stores, 27 Hiper-Bompreço stores, 15 Balaio stores, and three Hiper-Magazines (all originally parts of Bompreço). It also runs 19 Wal-Mart Supercenters, 13 Sam's Club stores, and two Todo Dia stores. With the acquisition of Bompreço and Sonae, Wal-Mart is currently the third largest supermarket chain in Brazil, behind Carrefour and Pão de Açúcar.

In June 2006, Wal-Mart was excluded from the investment portfolio of The Government Pension Fund of Norway, which held stock values of about US$ 430 million in the company, due to a social audit into alleged labor rights violations in the company's operations in the US and worldwide. Although Wal-Mart did not respond to questions from the fund's auditors, the company later claimed the decision "don't appear to be based on complete information".

In July 2006, Wal-Mart announced its withdrawal from Germany due to sustained losses in a highly competitive market. The stores were sold to the German company Metro during Wal-Mart's fiscal third quarter.

In November 2006, Wal-Mart announced a joint venture with Bharti Enterprises to open retail stores in India. As foreign corporations are not allowed to directly enter the retail sector in India, Wal-Mart will operate through franchises and handle the wholesale end. The partnership will involve two joint ventures; Bharti will manage the front end involving opening of retail outlets, while Wal-Mart will take care of the back end, such as cold chains and logistics.

In 2008, Wal-Mart named German retailing veteran Stephan Fanderl as the president of Wal-mart Emerging Markets-East in an effort to, "explore retail business opportunities in Russia and neighboring markets." The market is estimated to be worth more than $140 billion per year in food sales alone.

In January 2009, the company acquired a controlling interest in the largest grocer in Chile, Distribucion y Servicio D&S SA.

Wal-Mart's business model is based on selling a wide variety of general merchandise at "always low prices." The company refers to its employees as "associates". All Wal-Mart stores in the US and Canada also have designated "greeters", who welcome shoppers at the store entrance.

In June, 2007. Wal-Mart announced it was retiring the blue vest its 1.5 million associates wear, and replacing it with khakis and polos. The replacement was to help Wal-Mart increase sales.

Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear in the store. Instead, it focuses on selling more popular products and often pressures store managers to drop unpopular products, as well as asking manufacturers to supply more popular products.

On September 14, 2006, the company announced that it would phase out its layaway program, citing declining use and increased costs. Layaway ceased to be offered on November 19, 2006, and required merchandise pickup by December 8, 2006. Wal-Mart now focuses on other payment options, such as increased use of six- and twelve-month, zero-interest financing. The layaway location in most stores is now used for Wal-Mart's Site-To-Store program, which was introduced in March 2007. This enables walmart.com customers to buy goods online with a free shipping option, and have goods shipped to the nearest store for pickup.

In 2006, Wal-Mart was 67th most profitable corporation (profits divided by total revenue), behind retailers Home Depot, Dell, and Target, and ahead of Costco and Kroger. For the fiscal year ending January 31, 2006, Wal-Mart reported a net income of $12 billion on $340 billion of sales revenue (3.5% profit margin). For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for about 20.1% of total sales. As of Jan 8, 2009, net sales for the 48-week period ending Jan 2, 2009 was $370.5 billion, up 6.5% from the previous year's results.

Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. Michael T. Duke serves as Chief Executive Officer (CEO), and Lee Scott, formerly CEO, serves as Chairman of the Executive Committee of the Board. Other members of the board include Aída Álvarez, James Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas Daft, David Glass, Gregory B. Penner, Allen Questrom, Arne M. Sorenson, Jim Walton, Christopher J. Williams, and Linda S. Wolf.

Notable former members of the board include Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), the latter having served as Vice Chairman. Clinton left the board before the 1992 U.S. Presidential Election, and Coughlin left in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart. On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.

Wal-Mart also had to face fierce competition in some foreign markets. For example, in Germany it had captured just 2% of German food market following its entry into the market in 1997 and remained "a secondary player" behind Aldi with a 19% share. In July 2006, Wal-Mart announced its withdrawal from Germany. Its stores were sold to German company Metro. Wal-Mart continues to do well in the UK, and its ASDA subsidiary is the second largest chain after Tesco.

In May 2006, after entering the South Korean market in 1998, Wal-Mart withdrew and sold all 16 of its South Korean outlets to Shinsegae, a local retailer, for $882 million. Shinsegae re-branded the Wal-Marts as E-mart stores.

Wal-Mart struggled to export its brand elsewhere as it rigidly tried to reproduce its model overseas. In China, Wal-Mart hopes to succeed by adapting and doing things preferable to Chinese citizens. For example, it found that Chinese consumers preferred to select their own live fish and seafood; stores began displaying the meat uncovered and installed fish tanks, leading to higher sales.

In addition, under heavy pressure from the Chinese government, Wal-Mart accepted a form of organized labor in China. Chinese labor unions do not negotiate contracts but simply pay dues to the government, "to secure the social order." However, Chinese consumers may be more open to Americana than shoppers in Europe.

Each week, about 100 million customers, nearly one-third of the U.S. population, visit Wal-Mart's U.S. stores. Wal-Mart customers give low prices as the most important reason for shopping there, reflecting the "Low prices, always" advertising slogan that Wal-Mart used from 1962 until 2006. The average US Wal-Mart customer's income is below the national average, and analysts recently estimated that more than one-fifth of them lack a bank account, twice the national rate. A Wal-Mart financial report in 2006 also indicated that Wal-Mart customers are sensitive to higher utility costs and gas prices. A poll before the 2004 US Presidential Election indicated that 76% of voters who shopped at Wal-Mart once a week planned to vote for George W. Bush, while only 23% planned to vote for John Kerry. When measured against other similar retailers in the U.S., frequent Wal-Mart shoppers were rated the most politically conservative.

In 2006, Wal-Mart took steps to expand its US customer base, announcing a modification in its US stores from a "one-size-fits-all" merchandising strategy to one designed to "reflect each of six demographic groups – African-Americans, the affluent, empty-nesters, Hispanics, suburbanites and rural residents." Around six months later, it unveiled a new slogan: "Saving people money so they can live better lives". This reflects the three main groups into which Wal-Mart categorizes its 200 million customers: "brand aspirationals" (people with low incomes who are obsessed with names like KitchenAid), "price-sensitive affluents" (wealthier shoppers who love deals), and "value-price shoppers" (people who like low prices and cannot afford much more). Wal-Mart has also made steps to appeal to more liberal customers, for example, by rejecting the American Family Association's recommendations and carrying the DVD Brokeback Mountain, a love story between two gay cowboys in Wyoming.

Labor unions, Christian organizations, and environmental groups have criticized Wal-Mart for its policies and/or business practices. In particular, several labor unions blame Wal-Mart workers' unwillingness to join their organizations on the company's anti-union stance. Others disapprove of the corporation's extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices, and use of public subsidies, and the impact of stores on the local economies of towns in which they operate.

In 2005, two labor unions launched campaigns portraying Wal-Mart negatively. These included Wake Up Wal-Mart (United Food and Commercial Workers) and Wal-Mart Watch (Service Employees International Union). By the end of 2005, Wal-Mart launched Working Families for Wal-Mart, an operation managed by Wal-Mart to tell the company's side of the story. Additional efforts to counter criticism included a PR campaign in 2005, managed through its PR website walmartfacts.com, as well as several television commercials. The company retained the PR firm Edelman to respond to negative media attention, and started interacting directly with bloggers by sending them news, suggesting topics for postings, and sometimes inviting them to visit its corporate headquarters.

Wal-mart has been accused of locking employees in at night, paying employees below minimum wage, and exposing employees to health hazards.

Full-time Wal-Mart employees earn an average of $10.78 per hour, But critics point out that the starting pay can be far lower — placing some employees with children below the poverty line — and that payrates do not rise as quickly as with unionized companies. Others decry low levels of health coverage or overpriced health insurance, though the company reports that it offers rates as low as $5 per month in some areas ($9 per month nationwide) and that 92% of its associates are insured (though not necessarily through Wal-Mart). Other grievances regard poor working conditions, unfavorable employer-employee relationships, and anti-union policies. Many suggest that Wal-Mart's high annual turnover-rate of ~70% shows that workers are dissatisfied and maltreated.

In response, Jay Nordlinger of National Review argues that Wal-Mart is attacked simply because it is a leader of the Fortune 500 list or the largest employer in America, and a "free-market success story". Penn & Teller devoted an episode of their show to an analysis of Wal-Mart criticism as a social movement. They theorized that despite the noble rhetoric, the real motivation of "Wal-Mart haters" was rooted in human psychology. They suggested that hating Wal-Mart permits a person "to feel better about themselves" for three main reasons: They "don't run a greedy international conglomerate", they aren't Wal-Mart workers, widely considered "low-skilled, minimum wage drones", and they aren't Wal-Mart customers thought of as "toothless, welfare-getting hillbillies". Wal-Mart stores are unionized in every country outside of North America.

Wal-Mart has opposed the Employee Free Choice Act (EFCA), which would make it easier for workers to unionize. In mid-2008, the company required store managers and department heads to attend meetings at which opposition to the EFCA was used as a fulcrum for criticism of Democratic candidates in the elections for the United States Senate and the House of Representatives, as well as of the presumptive Democratic Presidential nominee, Senator Barack Obama. At these meetings, Wal-Mart human resources managers warned that Democratic victories might result in passage of the EFCA and hence more unionization. At one meeting, a Wal-Mart customer service supervisor from Missouri stated, "I am not telling you how to vote, but if the Democrats win, this bill will pass and you won't have a vote on whether you want a union. A Wal-Mart spokesman, while acknowledging that the meetings were taking place nationwide, said, "If anyone representing Wal-Mart gave the impression we were telling associates how to vote, they were wrong and acting without approval." Several labor-rights groups including the AFL-CIO have asked the Federal Election Commission to investigate whether Wal-Mart broke federal election rules by advocating against Democratic candidate Barack Obama in meetings with employees.

Wal-Mart is currently facing a gender discrimination lawsuit, Dukes v. Wal-Mart Stores, Inc., which alleges that female employees were discriminated against in matters regarding pay and promotions. In February 2007, the United States Court of Appeals for the Ninth Circuit issued a 2–1 ruling which affirmed a lower court ruling to certify the case as a class-action lawsuit; plaintiffs estimate that about 1.6 million women could be included in the suit. According to a consultant hired by plaintiffs in a sex discrimination lawsuit, in 2001, Wal-Mart's EEOC filings showed that female employees made up 65% of Wal-Mart's hourly paid workforce, but only 33% of its management. Just 35% of its store managers were women, whereas 57% were at comparable retailers. The economist Marc Bendick Jr described the ratio of women store managers in 2001 as below that of comparable companies in 1975. On April 3, 2007, Wal-Mart reported that female employees were now 61% of its workforce and 40% of its management.

A similar lawsuit, EEOC (Janice Smith) v. Wal-Mart Stores, Inc., was filed on August 24, 2001. It accused the retailer of discriminatory hiring practices at its London, Kentucky Distribution Center, dating back to 1995. Mauldin v. Wal-Mart Stores, Inc. charges that the company's denial of health insurance coverage for birth control is unfair to female employees. In 2002, the lawsuit was granted class action status, allowing all female employees after March 2001 to file claims if they were using contraceptives.

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History of Wal-Mart

Sam Walton's original Walton's Five and Dime, now the Wal-Mart Visitor's Center Bentonville, Arkansas.

This article covers the history of Wal-Mart, the large international discount retail chain.

The history of Wal-Mart can be traced back to the 1940s when Sam Walton began his career in retailing. After being interviewed by recruiters from both Sears Roebuck and JC Penney just before graduating from the University of Missouri in Columbia, Sam accepted a job offer from JC Penney. He began working at a JC Penney store in Marshalltown, Iowa on June 3, 1940, making a salary of $2 a month. During his employment there, Sam was able to meet James Cash Penney, the department store's founder, during a visit to the store. He remained at JC Penney for eighteen months.

In September 1944, Walton acquired, from George Scharlott, the franchise and lease on a Ben Franklin in Newport, Arkansas. The variety store was part of a chain operated by the Butler Brothers, a regional retailer. After three years, Walton increased annual sales from $80,000 to $225,000 by 1948. However, the landlord, P.K. Holmes, declined to renew the lease on favorable terms and Walton was forced to relocate before the end of 1950. Walton was prepared to purchase a five-and-dime from Jim Dodson in Siloam Springs, Arkansas, but the two were $7,000 apart on agreement on a purchase price. On May 9, 1950, Walton purchased a store from Luther E. Harrison in Bentonville, Arkansas, and opened Walton's 5 & 10. Thus, the Ozark Mountain town of 2,900 residents would become the headquarters for the world's largest retailer.

As a typical businessman, Walton was always looking for better deals from his suppliers, and he realized that he could obtain higher sales volume by passing on the savings to his customers, instead of pocketing them. By 1962, he had eleven Walton's stores Inspired by the successes of other discount department store chains, Walton opened the first store in his own discount chain in Rogers, Arkansas that year. Responsible for the purchase and maintenance of signage, Walton's assistant, Bob Bogle, came up with the name "Wal-Mart" for the new chain. By 1967, the company grew to 24 stores across the state of Arkansas, and had reached $12.6 million in sales, and by 1968, the company opened its first stores outside of Arkansas in Sikeston, Missouri and Claremore, Oklahoma.

The company's first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma, and entered Tennessee in 1973, and Kentucky and Mississippi in 1974. As the company moved into Texas in 1975, there were 125 stores with 7,500 associates, and total sales of $340.3 million.

By 1977, Wal-Mart made its first corporate acquisition, assuming ownership and operation of the Mohr-Value stores in Michigan and Illinois. This was followed by the acquisition of the Hutcheson Shoe Company in 1978.

Also in 1978, Wal-Mart branched out into several new markets, launching its pharmacy, auto service center, and jewelry divisions.

By 1979, with 276 stores and 21,000 associates, Wal-Mart reached $1.248 billion in sales.

In 1981, Wal-mart moved into the southeastern U.S. market, opening stores in Georgia and South Carolina, and acquiring 92 Kuhn's Big K stores. They moved into Florida and Nebraska in 1982.

In April 1983, the company opened its first Sam's Club store, a membership-based discount warehouse club, in Midwest City, Oklahoma. They also opened new Wal-Mart stores in Indiana, Iowa, New Mexico and North Carolina, and implemented "people greeters" in all of their stores. In 1984, they entered the Virginia market.

In 1985, with 882 stores with sales of $8.4 billion and 104,000 associates, the company enters Wisconsin and Colorado, and Minnesota stores first open the following year, in 1986.

By the company's twenty-fifth anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates. Also this year, they had completed their satellite network, a $24 million investment, linking all operating units of the company with their Bentonville Office via two-way voice, data, and one-way video communication. At the time, this was the largest private satellite network, and allowed the corporate office to track inventory, sales, and send instant communication to their stores. Continuing their technological upgrades, they had equipped 90% of their stores with barcode readers by 1988, to further assist in keeping track of their large inventory.

In February 1988, company founder Sam Walton stepped down as Chief Executive Officer, and David Glass was named to succeed him. Walton remained on as Chairman of the Corporate Board of Directors, and the company also restructured their senior management positions, elevating a cadre of executives to positions of greater responsibility.

Also in 1988, the first Wal-Mart Supercenter opened in Washington, Missouri. The supercenter concept features everything contained in a standard Wal-Mart discount store, in addition to a tire and oil change shop, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops such as banks, cellular telephone stores, hair and nail salons, video rental stores, and other fast food outlets.

By 1989, Wal-Mart was operating in 26 states with the addition of Michigan, West Virginia, and Wyoming. By 1990, they entered the markets of California, Nevada, North Dakota, Pennsylvania, South Dakota and Utah. The Wal-Mart Visitor's Center also opened this year on the site of Sam Walton's original store.

The 1990s saw an era of furious growth on an unprecedented scale and the incorporation of several new ideas and technology into the business.

In 1990, US sales had quadrupled to $32 billion over the previous five years and Wal-Mart acquired The McLane Company, a food service distributor, which was later sold to Berkshire Hathaway in 2003.

In 1991, the company moved into the Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey and New York markets. Wal-Mart entered the international market in this year, with the opening of their first store in Mexico City. They also acquired Western Merchandisers, Inc. of Amarillo, Texas. 1991 also saw the launch of the Sam's American Choice brand of products. Sam Walton passes away on April 5, 1992, shortly after U.S. President George H. W. Bush presents him with the Presidential Medal of Freedom. His eldest son, S. Robson Walton, succeeds him as Chairman of the corporate board of directors, on April 7, 1992. This year, Wal-Mart had a presence in 45 states with the addition of Idaho, Montana, and Oregon, as well as Puerto Rico.

In 1993, the Wal-Mart International Division is formed with Bobby Martin as its president. The company also enters the U.S. markets of Alaska, Hawaii, Rhode Island and Washington. Their stores also achieve the billion-dollar sales mark in one week in December 1993.

Wal-Mart acquired 91 PACE Membership Warehouse clubs from Kmart and 122 Woolco stores in Canada in 1994.

In 1994, Wal-Mart opened 3 value clubs in Hong Kong, while Canada now has 123 stores and Mexico, 96.

Also in 1994, the Code Adam program was implemented for lost children. The program was named after Adam Walsh, the 6-year-old son of John Walsh, who was abducted from a Florida department store and later found murdered in 1981. Other major retailers have since implemented similar programs.

By 1995, Wal-Mart had 1,995 discount stores, 239 Supercenters, 433 SAM'S CLUBS and 276 international stores with sales at $93.6 billion (including US sales of $78 billion) and 675,000 associates. Wal-Mart entered its 50th state (Vermont), and enters the South American market, with three new units in Argentina and five in Brazil. The company enters the Chinese market in 1996 through a joint-venture agreement.

In 1997, Wal-Mart replaced Woolworth on the Dow Jones Industrial Average. The company has its first $100 billion sales year, with sales totaling $118.1 billion. Also this year, they acquire 21 Wertkauf stores in Germany, and introduce their OneSource nutrition centers.

In 1998, Wal-Mart introduces the Neighborhood Market concept at three stores in Arkansas. Neighborhood Market stores are predominantly grocery stores, and are meant to attract customers with easier parking, less crowded aisles and quicker checkout.

Also in 1998, Wal-Mart launched its Wal-Mart Television Network, a vast, in-store advertising network showing commercials for products sold in the stores, concert clips and music videos for a recording artist's media, trailers for upcoming movie releases, and news.

In 2000, H. Lee Scott was named president and CEO and US sales had doubled to $156 billion since 1995.

Also in 2000, Wal-Mart was ranked fifth by Fortune magazine on its Global Most Admired All-Stars list, and in 2003 and 2004, as the most admired company in America.

In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world, including 3,800 stores in the United States and 3,800 international units, and employing more than 1.6 million associates worldwide. In fact, their U.S. presence had grown so rapidly that there were only small pockets of the country that remained further than 60 miles away from the nearest Wal-Mart. Approximately 138 million customers visited Wal-Mart stores each week all over the world. Their corporate philanthropy efforts also assisted the U.S. hurricane relief efforts with $18 million in cash donations.

In 2006, on 26th of July Wal-Mart announced its complete pull-out of the German market. All existing 85 stores were sold to the Metro Group which in turn turns most of the stores of their own brand real,-.

On September 12, 2007, after 19 years, Wal-Mart introduced new advertising with the slogan, "Save Money Live Better," instead of "Always Low Prices, Always". It commissioned Global Insight for the ads and the report stated that as of 2006, the retailer saves American families $2,500 yearly (up 7.3% from $2,329 , 2004). The new research found that the reduction in price levels due to Wal-Mart resulted to savings for consumers of $287 billion in 2006, which is $957 per person or $2,500 per household.

On June 30, 2008, Wal-Mart unveiled the company's new logo, which lacks the star in the middle. The new company logo contains the word "Walmart".

In late 2005, Wal-Mart designed two experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, which feature wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens. The buildings also include many other energy and cost and energy-saving technologies.

In March 2006, Wal-Mart sought to attempt to appeal to a more affluent demographic, with the opening of a new supercenter in Plano, Texas, and is intended to compete against stores that some view as more upscale and appealing, such as Target. The new store features wooden floors, wider aisles, a sushi bar, a coffee/sandwich shop (with free Wi-Fi Internet access), a Subway, and higher-end items such as microbrew beer, expensive wines, and high-end electronics. The exterior sports the less-common hunter green background behind the Wal-Mart letters instead of the trademark blue.

In response to the popularity of organic food supermarkets, such as Whole Foods and Wild Oats, Wal-Mart announced plans in May 2006, to increase the amount of organic food available in its stores. They announced that both conventionally grown and organic versions of certain products would be available, and the price of organic versions would not be more than 10% over the price of conventionally-grown products. Since Wal-Mart is one of the nation's largest grocery retailers, there was some concern expressed that their push to lower prices would not be sustainable for inexpensive organic food.

Over the last decade or so Wal-Mart has become involved in thousands of lawsuits for a variety of reasons. The majority of the suits are class action lawsuits in which employees are suing for unpaid wages. They have also run into many discrimination cases in which employees are suing for being profiled out of money or out of jobs. For instance, there were two separate cases, one in 2004 and one in 2005 in which African Americans were suing two different Wal-Marts for denying them jobs based on race. These became so popular that the reverend Jesse Jackson spoke during both of the proceedings. There are also many lawsuits in which women are suing Wal-Mart for discriminating against them. In one article written in 2004 USA today mentioned 32 different lawsuits that involved women suing Wal-Mart. All of this has not affected Wal-Mart financially however, according to Fortune 500, Wal-Mart still had $351 billion in revenue ($11 billion in profit) in 2007, a new high for the corporation.

On December 3, 2008, the family of Wal-Mart service worker Jdimytai Damour, who was killed by a stampede of shoppers frantically entering a Valley Stream, New York Wal-Mart store on Black Friday (November 28), filed a wrongful death lawsuit against the corporation; Damour's family alleged Wal-Mart of encouraging a mass number of customers to come to the store simultaneously.

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Source : Wikipedia